Australian officials have been involved in confidential talks with the US aimed at heading off a formal trade dispute over the confiscation by NSW of US-owned assets worth $131 million.

Unless the affair is resolved, Australia could come under pressure from the Trump administration to agree to international arbitration aimed at forcing the federal government to compensate US investors.

Three-way talks over the affair took place within the past two weeks and involved representatives of the federal and NSW governments and the US.

Federal Trade Minister Steve Ciobo was asked about the phone conference with the Americans before he left yesterday for talks in the US. His spokesman said the minister had nothing to say.

The affair threatens to embarrass NSW Premier Gladys Berejiklian, who leaves today to join Mr Ciobo and Malcolm Turnbull for discussions with US officials.

The three-way talks were aimed at addressing growing concern in Washington over the way the government of one of Ms Berejiklian’s predecessors, Barry O’Farrell, expropriated a coal exploration licence from a mining company, NuCoal Resources, that is part-owned by US institutions.

NuCoal chairman Gordon Galt said the latest talks were the result of a confidential letter from the US to the federal government.

“We understand the three affected parties, Australia, NSW and the United States, were all parties to the latest discussions,” he said.

“They have now gone away to seek counsel from their bosses.”

Mr Galt said he was aware the NuCoal expropriation would be raised during talks between US governors and Ms Berejiklian. “We are also pushing hard for it to be raised at the Trump-Turnbull level,” he said.

Mr Galt had provided a briefing on the affair for a US senator, who raised it with Australia’s ambassador to the US, Joe Hockey.

“I expect that at least one and possibly three US governors will raise this matter at the talks,” he said.

Before the expropriation, NuCoal had been valued at about $400m and US institutions owned 30 per cent of the company.

After the expropriation, NuCoal’s capital value fell to about $20m. Once interest is added to the value of the lost asset, NuCoal estimates its shareholders are owed a total of $437m.

On NuCoal’s figures, US institutional investors are owed $131m while the company’s Australian shareholders are owed $306m.

The US investors have complained to their government that the expropriation breaches a treaty that guarantees American assets will not be taken by Australia unless this is done with due process of law and is followed by prompt and adequate compensation.

They believe the conduct of the NSW government has placed Australia in breach of its free-trade agreement with the US.

The O’Farrell government cancelled NuCoal’s licence using special legislation that banned legal challenges, prevented the payment of compensation and was based on accusations of wrongdoing by others, not NuCoal.

The expropriation had been based on a report by the NSW Independent Commission Against Corruption that had examined the way in which the former Labor government had issued several coal exploration licences.

NuCoal, which was not a party to ICAC’s inquiry, obtained its licence 14 months after it had been issued when it bought the original licenceholder, Doyles Creek Mining.

No accusations of wrongdoing were ever made against NuCoal.

At the time of the expropriation, the findings in ICAC’s report had not been tested in court.

Last week, the NSW parliament was told the report had ignored evidence given in secret by former Labor premier Nathan Rees. It instead had relied upon inconsistent testimony that Mr Rees gave at a public hearing conducted by ICAC, parliament was told.

The O’Farrell government accepted ICAC’s recommendation that the licence should be expropriated but rejected an associated recommendation that innocent parties should be compensated for losses caused by the expropriation.

As well as stripping NuCoal of its exploration licence and absolving itself of liability, the O’Farrrell government required NuCoal to give the government — without compensation — all the exploration data it had assembled.

The NuCoal affair has long been a cause of concern to the American Chamber of Commerce in Australia.

Two years ago, the US business group had talks on the affair with officials from the Department of Foreign Affairs and Trade and referred it to the office of the US Trade Representative.

After the talks with DFAT, the former chief executive of AmCham Australia, Niels Marquardt, told The Australian the NuCoal expropriation was “a ticking time bomb”.

]]>http://wavetheflag.org.au/2018/02/18/icac-exposed-yet-again-sky-news-podcast/feed/0Berejiklian’s government needs to right a great wronghttp://wavetheflag.org.au/2018/02/16/berejiklians-government-needs-to-right-a-great-wrong/
http://wavetheflag.org.au/2018/02/16/berejiklians-government-needs-to-right-a-great-wrong/#commentsFri, 16 Feb 2018 05:21:37 +0000http://wavetheflag.org.au/?p=1362There is now no doubt that former NSW premier Barry O’Farrell relied upon a flawed ICAC report when his government destroyed private property worth several hundred million dollars.

That wrong needs to be righted and the statement in parliament this week by fellow Liberal Peter Phelps will help. It has blown the whistle on O’Farrell’s lack of judgment and revealed outrageous conduct during ICAC’s inquiries into the allocation of coal exploration licences.

This is not the first time ICAC has suppressed exculpatory evidence. It happened in the botched criminal prosecution of former emergency services commissioner Murray Kear and it forms the basis of a civil claim by businessman Charif Kazal. Another businessman, Craig Ransley, was exonerated in court only after the new regime at ICAC released exculpatory evidence that had previously been withheld.

The Phelps statement raises uncomfortable questions for Nathan Rees, a former Labor premier, who changed his evidence about jailed former minister Ian Macdonald in a way that favoured ICAC’s case theory.

Rees and O’Farrell were both invited to provide statements but have not done so.

Also mentioned by Phelps is ICAC’s former counsel assisting, Geoffrey Watson SC. Phelps has obtained copies of the transcript of ICAC’s private examination of Rees and alleges Watson was the man asking the questions. Watson has denied the allegations Phelps made against him in parliament.

Rees’s answers on the transcript are starkly at odds with what he later said at ICAC’s public hearing.

The Phelps statement refers several times to ICAC’s Acacia inquiry. Watson did not have any role in Acacia.

A solicitor who was closely involved with this inquiry says it was conducted jointly with two other inquiries known as Operation Jarillo and Operation Jasper.

When Watson was asked if the transcript of the private hearing bearing his name was wrong he replied: “Mr Phelps says that I was guilty of malfeasance and that I withheld exculpatory evidence in Operation Acacia. This is untrue. I was not even in Operation Acacia. I did not know whether Mr Rees gave evidence in Operation Acacia — it looks like he did.

“I was not, by law, permitted to see any submissions made about Mr Rees’s evidence. Obviously, given I was not in the inquiry, I was not able to tender — much less withhold — any evidence.

“So you can see what Mr Phelps said is false. That won’t worry him because what he says is privileged, but now you know the facts you are in a different position.

“Please do not write back — I am busy and have moved on to other work beyond ICAC. So should you,” Watson added.

The bottom line in all this is that it does not matter which individual suppressed the fact that Rees had changed his story. The commission itself is responsible for its reports.

And the Acacia report that went to parliament makes no mention of the changeable nature of Rees’s evidence. To the contrary, it says: “Mr Rees was an impressive witness.”

Ron Heinrich, who is the solicitor acting for Macdonald, said it was clear that exculpatory evidence had been withheld.

“Mr Rees gave contradictory evidence in the private hearings as opposed to the public hearings — a fact that must have been known to ICAC,” said Heinrich, who is a former president of the Law Council of Australia.

The Liberal Party’s Peter Phelps told the state’s upper house this week that key parts of the exculpatory material consisted of evidence given in private by former premier Nathan Rees that contradicts what Mr Rees later said in public at an ICAC hearing.

Mr Rees’s private evidence, which seems to support Macdonald’s version of events, was never revealed by ICAC, which produced a report to parliament that relies on the former premier’s public evidence.

Dr Phelps said ICAC’s decision to withhold the private testimony was not merely a mistake, but was evidence of a systemic problem over many years that required an investigation by parliament’s ICAC oversight committee or some other committee.

A spokesman for Premier Gladys Berejiklian said she would not be providing a response.

The accusations against ICAC were made in a statement to parliament on Wednesday that questioned the basis for the commission’s finding of corruption against Macdonald, criticised ICAC’s former counsel assisting Geoffrey Watson SC, and rebuked former Liberal premier Barry O’Farrell for his response to ICAC’s finding.

ICAC’s flawed report on the affair had led to the unjustified expropriation of a coal exploration licence by the O’Farrell government that had stripped the assets of innocent people, Dr Phelps said.

“We stole it — there is no other word for it — for a base political reason,” he said.

This is the latest in a series of public statements in which Dr Phelps has outlined the damage inflicted on property rights and investor confidence because of the expropriation of assets based on ICAC findings that were never tested in court. “I will not stop,” Dr Phelps told parliament.

“I will not be silent until these people get justice and we remove this stain not only from the future budget bottom line, but also from the justice system of NSW.”

Macdonald, who is a former mining minister, is serving 10 years in prison after being convicted last year of misconduct in public office over the allocation of a coal exploration licence at Doyles Creek to a company that had planned to establish a training mine.

Doyles Creek Mining had been led by former union official John Maitland who has been jailed for six years for being an accessory.

Dr Phelps told parliament that ICAC’s claim of corruption against Macdonald rested on four points, all of which were false, and which formed the basis for the legislative expropriation of the Doyles Creek exploration licence without compensation.

At the time of the expropriation, the licence had been held by NuCoal Resources, a mining company with international and Australian shareholders that had bought the Doyles Creek project 14 months after the licence had been grated.

The fact that the expropriation was done by legislation, without judicial involvement, is at the core of concerns in the US that this incident means Australia has breached a free-trade agreement that promises to give American investments the protection of due process of law.

Dr Phelps told parliament that before the expropriation NuCoal had a capitalised value of $400 million, which had fallen to $20m after the government took its licence.

“In other words, it was a 95 per cent cut in the capital value of the company because Barry O’Farrell introduced legislation under the false claim that he was giving effect to the findings of corruption, which we now know in this instance at least, to have been substantially false, or at least highly compromised by the activities of ICAC itself,” Dr Phelps said.

Two of the grounds for ICAC’s finding against Macdonald were the allegations that he tried to cover up his wrongdoing by seeking third-party endorsement of the training mine, and that state cabinet should have made the decision to issue the licence instead of Macdonald who had been the minister responsible for mining.

Dr Phelps read into the Hansard record extracts from Mr Rees’s private testimony to ICAC in which the former premier said the allocation of a licence for a training mine should “not necessarily” have gone to cabinet because “if it’s a training mine you wouldn’t expect significant royalties to be flowing from it”.

“It is arguable that it, it didn’t, it didn’t, (sic) require formal cabinet consideration,” says the transcript that was read by Dr Phelps.

Six months after giving this testimony in private, Mr Rees was asked at an ICAC public hearing if the training mine proposal should have been brought to cabinet.

He said: “In my view, yes … yes, you would bring that to a cabinet or a budget committee”.

In another extract from Mr Rees’s private testimony that was read into Hansard, Dr Phelps said the former premier said he had suggested to Macdonald that third-party endorsements should be sought for the training mine.

The transcript that was read into the record by Dr Phelps contains an exchange between Mr Rees and ICAC’s former counsel assisting, Mr Watson, at a private hearing.

It shows that Mr Rees told Mr Watson that when he heard the case in favour of the training mine he concluded that it “stacks up”.

According to the transcript of Mr Rees’s private evidence, the former premier said “either myself or my office would have suggested ‘well that stacks up, that’s publicly defensible or defensible (sic) but why don’t you get — see — if Macdonald and his people can get some third-party endorsements of this approach just in order to demonstrate its bona fide should this emerge as an issue’.”

Dr Phelps told parliament that it was “utterly reasonable” for Mr Rees and his mining minister to obtain third-party endorsements so they would know the community wanted the training mine.

“The fact that ICAC took the reasonable directive of then premier Rees to then minister Macdonald as an example of how Macdonald tried to cover up the process is an example of how ICAC’s blind, wilful and horrendous scalp-hunting completely overtook its view of this matter,” Dr Phelps said.

He said ICAC and Mr Watson knew about what Mr Rees had said at his private hearing but did not use it in public hearings “because the testimony provides exculpatory evidence to Macdonald”.

Mr Rees and Mr O’Farrell did not respond to invitations to provide a response to Dr Phelps’ remarks.

‘I will not stop. I will not be silent until these people get justice’

PETER PHELPS
LIBERAL PARTY

(WTF) – used with permission.

]]>http://wavetheflag.org.au/2018/02/16/icac-withheld-evidence-phelps/feed/0The Hon. Dr Peter Phelps – Speech in Parliament (14/02/2018)http://wavetheflag.org.au/2018/02/15/the-hon-dr-peter-phelps-speech-in-parliament-14-02-2018/
http://wavetheflag.org.au/2018/02/15/the-hon-dr-peter-phelps-speech-in-parliament-14-02-2018/#commentsThu, 15 Feb 2018 04:52:13 +0000http://wavetheflag.org.au/?p=1344The following speech was given The Hon. Dr Peter Phelps in the Legislative Council of Parliament on 14 February 2018.

The Hon. Dr PETER PHELPS(16:58): I congratulate the Treasurer and Premier for the excellent budget. However, I have concerns that, while appearing to be somewhat circuitous, potentially have hundreds of millions of dollars worth of implications for the bottom line of Treasury. Once again, I return to the Independent Commission Against Corruption [ICAC] and its inspector. Last night, I said that the inspector should have additional resources to meet the investigative needs to properly look into Operation Acacia and Operation Jasper and the consequences that flow from that. The small amount of money that would be spent on the investigation could save this State hundreds of millions of dollars. To explain the situation, I will go back to the Doyles Creek incident and Operation Acacia. NuCoal, the company at the heart of the matter, suffered massive financial and reputational damage following the expropriation of mining licences by Premier O’Farrell.

The expropriation was predicated on some sort of corruption being at the heart of the awarding of the original exploratory licence [EL] by Ian Macdonald for a training mine at Doyles Creek. The claim of corruption is made on the basis of four points: Firstly, that Minister Macdonald knew that there were substantial resources in the EL; secondly, that he conspired with Construction, Forestry, Mining and Energy Union [CFMEU] boss John Maitland to obtain the EL without tender; thirdly, that Macdonald sought to cover his nefarious activities by seeking third-party endorsements for the training mine and; fourthly, that the awarding of the tender should have been a Cabinet decision. All four of these points are false, but were nevertheless used as the basis of the legislative expropriation without compensation that later took place.

In response to the claim that Macdonald knew that there were substantial resources in the EL, I refer to an article written by independent geologist Julian Malnic. Malnic noted that when the EL was granted there were only four drill holes in the 28 square kilometres of the gently rolling country of Jerrys Plains in the central Hunter. Drilled in the 1980s and 1990s, these holes did hit coal, but it was shot with intrusions that rendered them commercially worthless. The area had not been applied for by anyone for years, even though it was adjoined by major mines such as the Peabody’s Wambo Underground Mine and Anglo American’s Drayton mine. Even if the four holes had been good, their spacing was so sparse that it was impossible to join the dots and reasonably correlate which coal was running where hundreds of metres below the surface.

An independent geologist who put his report in the NuCoal prospectus, Guy Palese, had an adventurous theory that the intrusions were less to the south and that in that area the district’s champion seam, the Whyborn Seam, might not be speared and burned out. It was based on four holes and it was a long-shot theory. When they drilled it, the second NuCoal hole was close to smack in the middle of the exploratory licence. That hole showed what was ahead of them. The underlying Whynot Seam—I love whoever makes up the names of these coal seams; they obviously have a very interesting sense of humour—had become 70 per cent thicker and there was a significant amount at 3½ metres thick. Suddenly, there was serious potential in a previously unknown seam. Removing the geo-speak behind this, an unexpected discovery had taken place when the original target seam did not drill out but one of the other sundry seams below it suddenly presented thick, high-grade coal that was so clean it could have been exported for steel making. It was not thermal coal; it was 100 per cent coking coal.

This was the first evidence of commercially valuable coal deposits, but remember this: it was found after Macdonald granted the licence. Macdonald could not have had any knowledge that those coal seam deposits in the Whynot Seam existed before he granted the licence. The four original holes showed nothing and the commercially valuable deposits were only discovered by chance after the licence was granted. It is also worth noting that NuCoal purchased the Doyles Creek project 14 months after the licence was granted. The second part of the ICAC claim is that there was collusion. The simple fact is that Maitland had left the CFMEU by the time the new drill holes went down. Maitland was not part of the project at that stage. In fact, he was barely part of the project work at all.

The original Doyles Creek Mining company was headed by Andrew Poole and Craig Ransley. They were the driving force behind it. Maitland was brought in as chairman because, quite frankly, when dealing with miners it is useful to have someone from the CFMEU on the board. But more than that, Maitland was known for his relatively high degree of diplomacy, although I am not sure how that correlates with being part of the CFMEU. Apparently he was quite a diplomatic member with a long interest in worker’s safety. It is therefore unsurprising that Maitland was appointed chairman of an organisation that was then planning on creating a training mine. Why? Because Maitland himself always said that training mines make better miners. Anyone who does not believe that should take their next flight in an aircraft being flown by a pilot learning on the job. Training mines make better miners, and that was Maitland’s interest in the matter

I move now to the third and fourth points, which were that Macdonald sought to cover his activities by seeking third‑party endorsements and that the awarding of the tender should have been done by a Cabinet decision. This is where we enter the murky world of politics. In his public testimony to ICAC, which came six months after his private testimony, Nathan Rees was questioned by Peter Braham, SC:

BRAHAM: Do you remember when you first became aware of the Doyles Creek allocation?

REES: Not precisely, no,

BRAHAM: Do you remember the circumstances in which you became aware of it?

REES: Um, I recall there was a press release that went out in late December, um, it—I think the decision around it was made some, some time prior to that of ’08 but I couldn’t, I couldn’t recall precisely how, how it was put to me or when it was put to me.

………

REES: My impression at the time, my understanding at the time or my office as it relayed to me was that it was a training and safety mine, a training and safety mine that had limited geological significance and was of a niche value in the, in the scheme of training.

………

BRAHAM: Now, if that public benefit or possible public benefit was part of the proposal that also involved the award of an Exploration Licence by direct allocation which could otherwise have led to millions of dollars of revenue being generated in a public tender ought that in your view have been brought to the budget committee of Cabinet in the, in that the second half of 2008?

REES: In my view, yes. The proposition behind it may be well-intentioned or sound but you do need to test such things as projections for workforce shortages and skills analyses, those sorts of things, so yes, you would bring that to a Cabinet or a budget committee.

That is not what Nathan Rees said in his private testimony six months earlier. This is where the role of Geoffrey Watson comes in. Watson and Braham could not have been unaware of Rees’ earlier private testimony because Rees was interviewed by Watson the first time around:

WATSON: That what happened was that Macdonald awarded the Exploration Licensed to a small private company called Doyles Creek Pty Limited. And instead of taking money upfront from Doyles Creek Pty Limited, not one cent was obtained for Treasury purposes. Before that would occur would you normally think that a responsible Minister would raise that and have it discussed in Cabinet?

REES: Not necessarily because if it’s, if it’s the, if it’s the Doyles Creek concept as we’d previously discussed, it’s a training mine and you wouldn’t expect significant royalties to be flowing from it.

………

REES: Matters come to Cabinet largely for two reasons, either they’re a, they’re a request for additional funds from consolidated fund or a significant change of or introduction of policy. It is arguable that that training mine, and I think I see where you’re going with this, that that training mine fell into neither category. So on that basis it is arguable that it, it didn’t, it didn’t require formal Cabinet consideration.

Six months earlier, Nathan Rees said it did not require Cabinet consideration but in his public testimony six months later he said it should have come to Cabinet, although it was a training mine. I turn to what happened when Nathan Rees was asked about the earlier allocation of the licence:

WATSON: Do you remember the explosion that occurred when it got out that the Doyles Creek Exploration Licence had been allocated?

REES: I don’t recall an explosion at the time, I recall, I recall some of the events surrounding that announcement.

………

REES: I’m pretty certain it came to my and my office’s attention, either I raised with my staff with or they raised with me listen this has been done without a tender which immediately sparks a okay well there’s probably a reason for that let’s find that out before we go any further, and I may have had a discussion with Macdonald directly about this, I don’t recall that, it may have been done on my behalf by my staff but the, the essence of what came back when they would ask well why was there, why was there no tender process or what, what is it, this process seems atypical. The reply that came back was look this is a niche, this is a niche exercise, it’s a, it’s a safety and training mine for safety and training purposes,…mine safety is a big issue, there’s been any number of deaths in the mining industry and it was on that basis that either myself or my office would have suggested well that stacks up, that’s publicly defensible or defensible but why don’t you get—see—if Macdonald and his people can get some third-party endorsements of this approach just in order to demonstrate it’s bone fide should this emerge as an issue.

…in terms of political management are pretty, pretty much a garden variety approach of how you would deal with something that may not be immediately obvious as to why you done it.

One thing that ICAC uses against Macdonald is that he sought third-party endorsements. This was used as an example of how he tried to cover up his corrupt activity. But the private testimony of Nathan Rees states that Rees directed Macdonald to get third-party endorsements to validate the project. I will say that this approach is utterly valid. Many of us seek third-party endorsement for projects taking place in the community. For Premier Rees to tell his Minister to get third-party endorsements so that they knew the community wanted it was an utterly reasonable and normal thing to do. The fact that ICAC took the reasonable directive of then Premier Rees to then Minister Macdonald as an example of how Macdonald tried to cover up the process is an example of how ICAC’s blind, wilful and horrendous scalp-hunting completely overtook its view of this matter.

What did Nathan Rees do when he found out about this? He asked for it to be investigated, not unreasonably. In his private testimony, which ICAC, Watson and, presumably, Braham knew about but did not use in public hearings because the testimony provides exculpatory evidence to Macdonald, Rees said:

Now I don’t recall the precise timeline but it wasn’t long after it had been granted that it was sold or there was an interest divested for a considerable amount of money that benefited another, the player. My alarm bells went off at that point and I did ask my department to quietly get hold of and examine any files they could from the department involved just to satisfy ourselves that there hadn’t been any chicanery. Now, we certainly initiated the process and the, the outcome of it was thin and there was no smoking gun as it were.

………

WATSON: At one stage there was a moment when you told us, there were two occasions, that MacDonald had made decisions and you went to the particular agencies to try and acquire any files that you could and you spoke in the first instance about Doyles Creek getting some very thin documents and no smoking gun and in the second instance relating to Obeid’s property and the Exploration Licence being rebuffed. Can you, can you remember the names of any of the people at the agencies who were being approached?

REES: Yeah, no, and no, I wouldn’t have done that directly. The, the person to speak to on that would be John Lee who was my head of department at the time. I wouldn’t have made those approaches directly.

Was John Lee called by ICAC? The answer is no, he was not even interviewed by ICAC investigators. He was the person who was appointed to look into this matter and, as then Premier Rees said, there was no smoking gun.

What does all this mean? It means one of several things. If members want a clear example of malfeasance—I will not use the word misfeasance; it was malfeasance—by Geoffrey Watson and the ICAC, then look no further than this. They knew that there was exculpatory evidence dealing with the ministerial decisions of Macdonald in this case, and even though they knew it, they did not seek to raise it. More importantly, they did not seek to call any witnesses who could have corroborated the exculpatory evidence. Even worse, knowing what Nathan Rees had said in his private testimony, they let him do a complete 180-degree turn in relation to Cabinet in his public testimony. That is an outrage and a disgrace, and that is symptomatic of the rottenness of ICAC at its core. It is an example of not merely one mistake but a systemic problem which has occurred in ICAC over many years.

Where does this leave us? Following the ICAC report being presented as some sort of evidentiary proof of corruption at Doyles Creek, NuCoal had its licence expropriated without compensation. Members may ask: How much could that possibly be worth? It is known and can be quantified. At the time of the expropriation NuCoal had a capitalised value of about $400 million. That was made up of big institutional investors from the United States, Japan, New Zealand, and mum and dad investors, such as the Lantrys, whom I spoke about last night in this place. That capitalised value of $400 million at the time of the expropriation having taken place was reduced to $20 million. In other words, it was a 95 per cent cut in the capital value of that company because Barry O’Farrell introduced legislation under the false claim that he was giving effect to the findings of corruption, which we now know in this instance at least, to have been substantially false, or at least highly compromised by the activities of the ICAC itself.

He introduced legislation—and I will not talk about what happened in the party room—and members were brought back for one day in the summer break to get this legislation through to make a political point, to get some political scalps, to have a go at “Macca” and to have a go at Obeid. In the process we stripped the assets of innocent people. We have to remember that NuCoal bought the licence off Doyles Creek and we stole it—there is no other word for it—for a base political reason. In the process John Maitland and Ian Macdonald, whatever their faults, are now serving 10-year terms in prison. That demands an immediate correction, either by an investigation requested by the Premier to the Committee on the Independent Commission Against Corruption, or some other committee. That will enable these people to get their stories out and the exculpatory evidence can finally be adduced about not only Operation Jasper but also Operation Acacia and a range of other instances, such as the Murray Kear affair and the relations which the ICAC has had with certain unsavoury individuals.

This includes the Mount Penny arrangement, where one of the chief people relied on by the ICAC admitted he was a liar and a fraudster. His testimony was treated as sacrosanct, despite the fact that in the private inquiries that Geoffrey Watson had undertaken of this person he had admitted to his lying and fraudulent claims. He was treated as some sort of expert star witness. This is one of the most egregious examples of injustice, and we as members of Parliament who passed those two bills in January, and the subsequent bill under the Baird Government to retrospectively validate the findings of ICAC, have done a grave injustice. I will not stop, I will not be silent until these people get justice and we remove this stain not only from the future budget bottom line but also from the justice system of New South Wales.

]]>http://wavetheflag.org.au/2018/02/15/the-hon-dr-peter-phelps-speech-in-parliament-14-02-2018/feed/3The Hon. Dr Peter Phelps – Speech in Parliament (13/02/2018)http://wavetheflag.org.au/2018/02/14/the-hon-dr-peter-phelps-speech-in-parliament/
http://wavetheflag.org.au/2018/02/14/the-hon-dr-peter-phelps-speech-in-parliament/#commentsWed, 14 Feb 2018 05:29:27 +0000http://wavetheflag.org.au/?p=1338The following speech was given The Hon. Dr Peter Phelps in the Legislative Council of Parliament on 13 February 2018.

The Hon. Dr PETER PHELPS(17:04): I am not a member of the Committee on the Independent Commission Against Corruption [ICAC], but I commend its work and I commend the people who work on the committee. The committee report “Review of the 2014-2015 and 2015-2016 Annual Reports of the ICAC Inspector” relates to the work of the ICAC Inspector in the past two financial years. The ICAC Inspector for the last two years was the Hon. David Levine AO, RFD, QC, and is now Mr Bruce McClintock, SC. I commend their work.

The Inspector is an important position which maintains a role of watching over the Independent Commission Against Corruption and ensuring that in a number of instances, procedural fairness, amongst other things, has been granted to people who have attended ICAC. That is a very important role, given what has happened in ICAC over many years.

I refer members to recent reports in the media that people who have suffered particular hardship brought about by the investigations into Operation Jasper and Operation Acacia have been making representations to the current Inspector in relation to those investigations. I urge Mr McClintock, the new ICAC Inspector, to take these matters quite seriously. Operations Jasper and Acacia revolved around the granting of licences at Doyles Creek, Mount Penny and Glendon Brook. Allegations had been raised in relation to the involvement of Mr Eddie Obeid and Mr Ian Macdonald. I will come to that a little later. Suffice it to say that the conduct of operations Jasper and Acacia were dreadful—not least because of the involvement of the then Premier Mr Barry O’Farrell, who sought to intervene in the matter by writing directly to then Commissioner Ipp in relation to proposals for the expropriation of the titles at the Doyles Creek and Mount Penny operations.

As Liberals we should believe very strongly in the sanctity of private property and private property rights. But following the Operation Jasper and Operation Acadia investigations three bills were introduced. Two of those bills were introduced by Mr O’Farrell. The three bills were the Mining Amendment (ICAC Operations Jasper and Acacia) Bill 2014, the Criminal Assets Recovery Amendment Bill and the Mining and Petroleum Amendment Bill 2014. There was a subsequent bill introduced by Premier Baird; however, we do not need to go into that at this stage. Suffice it to say that the conduct of the inquiry in relation to Jasper and Acacia was substantially flawed. As I understand it, people who have suffered debilitating consequences of that inquiry have written to the current Inspector of ICAC, Mr McClintock, to seek some form of redress. That is an important feature of our system, and it should be followed through to the maximum extent possible.

Although Inspector Levine previously stated that he had limited resources to investigate these matters, I urge the Government to make more resources available if Inspector McClintock does not have the resources to deal with these matters effectively. The entire Acacia and Jasper investigation was handled terribly. It was handled almost to the point of gross mismanagement—the sort of gross mismanagement which leads one to consider whether it should be considered a valid investigation in the first place.

Certainly for the investors who were with NuCoal Resources and Cascade Coal the consequences have been absolutely terrible. After being called back to a sitting of this House at urgent notice by Premier O’Farrell, this House passed the ICAC bill which allowed for the expropriation without compensation. Why did we do that?

Members of this House were told that we did that because it was a recommendation of ICAC. What we were not told was that Premier O’Farrell had contacted Commissioner Ipp to have the commissioner look in the direction of recommending an expropriation of licence. We know about this only because an admission was made public subsequently that Premier O’Farrell had contacted Commissioner Ipp.

We also know that, even though there was no evidence whatsoever of corruption on the part of either Cascade or NuCoal, this Parliament decided to expropriate the licences from those companies without compensation, which was indirect contradistinction to what ICAC had recommended. ICAC had recommended that the licences be expropriated but that compensation be paid to innocent parties, including innocent investors in NuCoal and Cascade. Why did Premier O’Farrell decide to expropriate without compensation? I do not know. I can guess why. Perhaps he did not want to muddy the waters with ideas that there might have been some innocent people involved in those transactions—that it was all horrible “Macca” and horrible Eddie—whereas there are hundreds and hundreds of Cascade and NuCoal investors who now find themselves out of pocket.

It is worthwhile drawing to the attention of the House the experiences of the Lantry family, who have no objection to my mentioning their names. The Lantrys—Darrell, Michelle and their then two-year-old son, Oscar—were all shareholders. The family lost “a few hundred thousand” dollars, given that all parties, including the confiscator-in-chief former Premier Barry O’Farrell, declared NuCoal innocent, and are rightly calling for NuCoal to be compensated. Darrell Lantry explains:

I am an average guy who works my whole life, works two jobs and so forth, so had a go at the sharemarket over the years and have been semi-successful.

The 3,400 NuCoal shareholders became political cannon fodder for Premier O’Farrell and his pursuit of NuCoal and Cascade Coal. They were roadkill on the juggernaut that was directed towards Eddie Obeid. Michelle Lantry, who works full time, recalls:

When Barry Farrell first suggested the lease could be taken from NuCoal, I remember Darrell saying “that can’t happen, that’s never happened … they can’t just come and do that, that would never, never happen.”

Michelle Lantry is right. One of the first acts of this Parliament was to establish the principle that there should be no expropriation without compensation. The State Government granted the right to compensation until a later New South Wales Government changed the rules. That is not replicated in the Federal Constitution, which specifically states that expropriation must be met with fair and reasonable compensation. What the subsequent New South Wales Government did was rushed, silly, economically vandalic and now leaves the State facing large‑scale compensation claims. The claimant investors are not mum and dad Australians: They are Americans, New Zealanders and Japanese. Through the free trade agreements we have with those countries, all the American, New Zealand and Japanese investors have taken recourse to the non-expropriation clauses of those agreements to seek compensation from Federal Minister Ciobo. Ultimately, that compensation will fall back on the New South Wales Government.

It is time for the ICAC Inspector to seriously examine what happened in Operation Jasper and Operation Acacia, particularly focusing on the horrible manner in which it was handled and the disgraceful manner in which measures subsequently were implemented in Parliament. Finally, I state on the record that Ian Macdonald might not be innocent, but I am coming more and more to the belief that he was nowhere near as guilty as portrayed.

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http://wavetheflag.org.au/2018/02/14/the-hon-dr-peter-phelps-speech-in-parliament/feed/1NuCoal case key to US FTA dealhttp://wavetheflag.org.au/2018/02/09/nucoal-case-key-to-us-fta-deal/
http://wavetheflag.org.au/2018/02/09/nucoal-case-key-to-us-fta-deal/#respondFri, 09 Feb 2018 05:10:47 +0000http://wavetheflag.org.au/?p=1334Much has been written in the past few years about free trade agreements. Most recently the federal government has taken a leadership position in concluding Trans Pacific Partnership Mark 2 (which is the old TPP without the US), and has been extolling its virtues.

Foreign Minister Julie Bishop encouraged US President Donald Trump to reconsider his decision to not join the TPP, and Trump said he would consider joining if he got a better deal.

In reality, however, there are issues standing in the way of any US change of mind. And those issues go directly to whether Americans can trust Australian law to protect their investments in this country.

These were not publicly spoken of before Trump was elected, and when he walked away from TPP1, there was no need.

But the fact is the US will not enter any new FTA, or any revised FTA, while any matters under the existing FTA remain unresolved. This is US policy. And there are issues unresolved under the current FTA.

One of these is the expropriation of the Doyles Creek coal exploration licence by the NSW government in January, 2014.

US shareholders of ASX-listed NuCoal Resources, which held the Doyles Creek asset, have been, and still are, demanding the Australian government allows them to enter arbitration in the International Court of Justice to seek compensation from the Australian government.

The reason the Australian government is on the hook over the expropriation is not obvious, but under the existing FTA between the US and Australia, the Australian government took responsibility for any acts of the Australian states that contravened the FTA. So even though the NSW government was the “expropriator” of the asset, it is the Australian government that has to pay. Several meetings have been held on this matter between the governments of Australia and the US and more are planned. It is difficult to see how Canberra can avoid its responsibility in this case.

The past four years of discussion have demonstrated that the basic facts — there was an expropriation, and there was no compensation paid — are recognised by both governments.

The method of the expropriation, by the passing of a NSW law that excluded NuCoal from access to due process, is the major point at issue.

It is high time that this matter was resolved. The Australian government should be pressing the NSW government to compensate NuCoal, because the expropriation was a deed of the NSW government and was not the fault of the Australian government.

In recent times even a member of the Liberals in the NSW upper house gave a speech to this basic point. The compensation amount in question, while substantial, is minuscule when the benefits of having the US in the overall TPP arrangements are considered. The US government, on behalf of its investors, cannot be, and worse still be seen to be, a second-class citizen where trade matters with Australia are concerned.

FTA matters with China, Korea, ASEAN and now 10 more countries are resolved promptly, but the US has to come cap in hand because its FTA isn’t as good as theirs. Undoubtedly this is not the way we should be treating our biggest investor.

The NuCoal issue is an example of why the Trump administration is sceptical of trade agreements that his administration inherited.

If one of the US’s strongest allies won’t ensure a fair hearing for US investors that have been harmed, as called for under an existing agreement, then their negotiating demands for stronger/fairer agreements is rather understandable.

If Craig Ransley is right, the main reason he is not in prison is the change in approach that has taken place at the NSW Independent Commission Against Corruption.

ICAC found Mr Ransley corrupt in 2013 and later provided evidence to the NSW Director of Public Prosecutions that had been assembled during an inquiry known as Operation Acacia.

On Monday, District Court judge Peter Zahra found him not guilty of three criminal charges, carrying penalties of five years in prison, that were directly related to the Acacia findings.

The different outcome, according to Mr Ransley, is because just ­before his trial, the new com­miss­ioners running ICAC ­responded to a subpoena by providing “thousands and thousands of documents”. Among that material was a handful of exculpatory documents that Mr Ransley believes proved his innocence. “We won this case based on evidence,” he said. “That evidence was always in the possession of ICAC.”

The Acacia report, and the three criminal charges that were dismissed on Monday, had ­accused Mr Ransley of knowing that his company, Doyles Creek Mining, had submitted misleading information to a state government department as part of its application for a “training mine”.

In response to the subpoena, ICAC disclosed a document — previously unknown to Mr Ransley — in which changes had been made to the training mine application by John Maitland, who had chaired Doyles Creek Mining. Maitland has been jailed for aiding and abetting former mining minister Ian Macdonald in misconduct in public office over the creation of a coal exploration ­licence.

While Mr Ransley had been a director of Doyles Creek Mining, Judge Zahra said he had not been accused of acting with Macdonald and Maitland to engage in misconduct in public ­office.

“Ultimately I find that there is insufficient evidence to support an inference the accused knew in concurring in the publication of the training mine facility submission … that it contained a false statement,” Judge Zahra said.

ICAC’s Acacia report, however, says he agreed to the publication of false and misleading material and was corrupt.

The prosecution case was that Mr Ransley knew the application falsely claimed his company had a signed memorandum of understanding with Coal Services Pty Limited, an industry-owned company that provides services to the coal industry.

Mr Ransley said it was common ground that Doyles Creek Mining did not have such an agreement.

He said one of the documents disclosed by ICAC indicated that Maitland had removed the reference to Coal Services Pty Limited from a covering letter but residual ­references remained in the body of the application.

“It turns out that John as chairman, we found in these documents, had given instructions to the company lawyers to remove the words from the submission but they didn’t remove them,” Mr Ransley said.

“We don’t know where (ICAC) got it from, but they had it. John knew that it had to exist.”

Other material supplied in ­response to the subpoena related to the crown case that he knew it had been misleading to assert in the training mine application that the company had a partnership agreement with the Westpac Rescue Helicopter service.

Board documents from the helicopter service had already been tendered in evidence, but Mr Ransley said a more complete set of board documents had been ­produced by ICAC in response to the subpoena.

“One set of documents looked like there were things missing out of it, and the other set was real,” he said.

“And the real set included a board resolution of the finance committee resolving to sign the memorandum of understanding with Doyles Creek.”

According to Judge Zahra, the evidence suggested that “those within Helicopter Rescue Ser­­vices Pty Limited acted in the belief and presented themselves as having ­entered into a community partnership”.

After reviewing the evidence and the dealings between Doyles Creek Mining and the rescue service, the judge said he was unable to infer that Mr Ransley would have known there was no signed memorandum.

The Acacia report was very different. It found Mr Ransley was “intentionally dishonest or alternatively reckless” because he had agreed to publish false and misleading statements.

This is the second time the ­Acacia findings have not been ­endorsed by the justice system. ICAC also believed Doyles Creek Mining director Andrew Poole was corrupt but the DPP found there was insufficient evidence to charge him with any offence.